Demerit of the information concerning decision-making methodology: A dynamic Cournot game with adaptive expectation

It is not uncommon for firms to gain access to the information concerning not only the previous decisions of others but also their decision-making methodologies. However, few literatures study the information concerning decision-making methodologies in dynamic Cournot games. This paper considers a dynamic Cournot game with adaptive expectation. It is assumed that each firm extra acquires the information regarding the other competitors' decision-making methodologies, and the information will be employed to estimate the outputs of other firms in the next period. The information leads to a decline in the stability of the original Cournot-Nash equilibrium, as demonstrated by both theoretical analysis and numerical simulation. It implies that boundedly rational firms need be vigilant for the information concerning decision-making methodologies in certain cases.